Sez act

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 January 2014 As you know under sec.57 r/w Third Schedule of SEZ Act, 2005, a SEZ unit can claim stamp duty exemption.
For more clarity, I want to know whether a SEZ unit can claim stamp duty exemption for setting up its Registered office in DTA or outside SEZ area either on lease or purchase?

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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11 January 2014 The State Government has exempted SEZ Developer from payment of stamp duty and registration fees on the lease/license of plots; [SEZ Rules -2006 (Rule 5(5a)]

Procedure for claiming Stamp Duty and Registration Fees Exemption Certificate
.
Concerned SEZ Developer / Co-developer / Unit shall apply to Commissioner for Industrial Development and Director of Industries and Commerce with following documents for issue of Stamp Duty and Registration Fees Exemption Certificate.
•
In-principle/Formal approval letter and notification issued by Government of India in case of Developer /Co-developer and approval letter from Unit Approval Committee in case of SEZ units.
•
Memorandum of Articles of Association/Partnership Deed
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Project Report
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IEM licence/registration for SEZ units.
•
HLC / SHLCC approval and Govt.Order
•
Land documents, of purchased /acquired land as mentioned in ClauseIII(2) of State Policy for SEZs in case of SEZ Developer/Co-developer
•
Lease/Sub-lease deed in case of SEZ Units.
•
Loan documents for development of SEZ/unit
•
KSPCB clearance – CFE/CFO,if any.
•
Undertaking to abide the terms and conditions mentioned in the StatePolicy for SEZs 2009.
The Commissioner for Industrial Development and Director of Industries andCommerce has to scrutiny the above application and issue certificate as per
Annexure-5for SEZ Developer/Co-developer and
Annexure-6for SEZ Units.

Querist : Anonymous

Querist : Anonymous (Querist)

13 January 2014 Thank you very much sir for your valued comments, but while going through the provisions I could not find that whether SEZ Unit can ask for exemption for setting its Registered Office outside SEZ Area.

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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25 July 2025 Your question is insightful and very relevant to **SEZ units** seeking to optimize compliance and tax exemptions.

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## ✅ **Your Query:**

> *Can a SEZ unit claim **Stamp Duty Exemption** for setting up its **Registered Office** outside the SEZ (in DTA) — whether on lease or purchase?*

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## 📜 **Legal Reference:**

You referred to:

* **Section 57 of the SEZ Act, 2005** – which gives the Act **overriding effect** over other laws.
* **Third Schedule of the SEZ Act, 2005** – lists the **Stamp Duty Exemptions**.

The Third Schedule allows for **exemption from stamp duty** on instruments executed by or in favor of a developer or unit **for the purposes of the SEZ**.

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## 📌 **Key Principle:**

Stamp duty exemption is allowed **only for activities directly related to the SEZ’s "authorized operations"** within the **SEZ area**.

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## ❌ So, Is Exemption Available for Registered Office Outside SEZ?

**No, in general.**

A **registered office located outside the SEZ** (i.e., in DTA — Domestic Tariff Area) is **not part of the SEZ’s operational or physical infrastructure**, and therefore:

* It does **not qualify as “authorized operations”** within the meaning of the SEZ Act.
* Instruments executed for leasing or purchasing such property **do not qualify for stamp duty exemption**.

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## 🧾 Supporting Reasoning:

1. **Exemptions are location-specific**:
Exemptions under the SEZ Act apply only to:

* Land/buildings within the SEZ, or
* Infrastructure **directly linked** to SEZ activities (e.g., power lines, pipelines to the SEZ).

2. **Purpose is SEZ operations**:
Stamp duty exemption is tied to the **"purpose of development, operation, and maintenance"** of the SEZ — not administrative or corporate functions like a registered office in DTA.

3. **Clarifications from State Governments**:
Several state governments (like Maharashtra, Tamil Nadu, Karnataka) have **issued circulars** stating that **stamp duty exemption is not available** for:

* Offices outside SEZ,
* Residential properties for employees,
* Warehouses not linked to SEZ logistics chain.

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## ✅ **Only Possible Exception (Rare):**

If the **registered office outside SEZ** is explicitly **approved as part of authorized operations** by the **Approval Committee** (BoA) — which is highly unlikely — one may try to claim the exemption. But this is exceptional and needs strong justification.

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## 📌 Final Answer:

> **No**, a SEZ unit **cannot claim stamp duty exemption** under Section 57 r/w Third Schedule of the SEZ Act, 2005 for setting up its **registered office outside the SEZ area**, whether by lease or purchase.

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If you're dealing with a specific state, I can help check the **State Stamp Act** and any **circulars** issued regarding SEZ stamp duty benefits. Let me know.

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